Blue Cross requests 15 percent increase for Obamacare plans in 2018

Blue Cross Blue Shield, the only Alabama company that sells individual policies on the federal exchange, is requesting average premium increases of 15 percent next year, but rates for some customers could jump by 20 percent.

The rate increase requested for 2018 is significantly less than the 36 percent average rate increase approved last year and the 24 percent increase in 2016. But prices for certain silver-level plans, which are the most popular, could rise by 21 percent due to uncertainty about the future of some parts of Obamacare.

About 90 percent of the 190,000 consumers in Alabama who buy individual policies through the federal exchange receive subsidies to offset the cost of premium increases. Higher-income people who don't qualify for subsidies but still purchase insurance through the exchange will have to pay full cost.

"The average rate increase included in this filing is 15.7% affecting over 190,000 members and assumes the Cost-Sharing Reduction (CSR) program will not be federally funded," according to a company statement. "The range of rate increases for these products is 2.0% to 21.3%."

In its rate increase justification, Blue Cross cited policy changes that have been proposed by President Donald Trump. After the failure of GOP-led efforts to repeal and replace Obamacare, the president has suggested he would "let Obamacare implode" by taking steps to undermine policies that expand coverage and cut costs.

Recently, Trump tweeted that he might end cost-sharing reductions - federal payments to insurance companies to help make health care more affordable to low-income people. Cost-sharing reductions are only available for silver-level plans.

"If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!" Trump tweeted on July 29.

The bailouts he was referring to include cost-sharing payments. A lawsuit challenging the payments is pending, and Trump could choose to drop the administration's defense of the program. According to the Commonwealth Fund, the move would force insurers to raise rates by up to 27 percent on silver-level plans.

The company's statement also said it expected fewer healthy customers to sign up if federal authorities stopped enforcing the individual health insurance mandate, which requires people to obtain coverage or pay a tax penalty. Although Trump cannot end the mandate, he can instruct the IRS to reduce enforcement or increase exemptions. Insurers worry that such moves would take healthy customers out of the risk pool and increase costs for those who remain.

Although the rates for silver-level plans could jump by 18 to 21 percent, rate increases for other individual plans will be more modest next year, ranging between 2 and 5 percent. According to its statement, Blue Cross Blue Shield basically broke even on Obamacare plans last year, although the company still spent more than anticipated on medical costs.

"Blue Cross recognizes and regrets the impact the proposed rate increase will have on our ACA individual customers," read a statement sent by a company spokesperson. "Though the ACA individual market has been challenging, we hope this market will eventually stabilize. We believe everyone in Alabama should have access to quality healthcare at the most affordable price."

The Alabama Department of Insurance must review and approve the company's proposed rate increases. Members of the public can comment on the proposal, which can be viewed here.

Updated at 5:54 p.m. with a statement from Blue Cross Blue Shield of Alabama

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